Putin: U.S. ‘Provoked’ North Korea to Abandon Nuclear Deal

Putin speaks during his annual news conference in Moscow, December 14, 2017.

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Putin: U.S. ‘Provoked’ North Korea to Abandon Nuclear Deal

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Vladimir Putin

President of the Russian Federation

…in 2005 the concerned parties came to an agreement with North Korea that it would terminate its nuclear weapons programme ... Only several months later, the United States decided that these agreements were not enough. The US side promptly froze the accounts of North Korean banks and said that North Korea had to do something else outside the framework of these agreements. But North Korea decided not to bother and withdrew from all those agreements, and started developing its nuclear programme once again. Why did you do that? ... In reality, you provoked North Korea to withdraw.

During his annual press conference on December 14, Russian President Vladimir Putin made a series of claims, one of which Polygraph.info fact-checked here.

Responding to a question on U.S.-Russian cooperation on North Korea, Putin said the United States “provoked” North Korea to abandon the 2005 nuclear deal and re-start developing its nuclear weapons program.

Specifically, Putin said that:

Negotiators “came to an agreement” to terminate the nuclear weapons program, and;

Several months later the U.S. “froze the accounts” of North Korean banks, which “provoked North Korea to withdraw.”

However, it was a Macau-based-bank, under the control of the local government, not U.S. officials, which actually froze the accounts. Moreover, the allegations of money laundering that triggered the freezing of the accounts were made public four days prior to the nuclear agreement announcement by the parties.

It is important to note, however, that the Putin claim may contain a “kernel of truth,” as one expert put it, though a leading U.S. negotiator flat out disputes Putin’s version of events.

So let’s look at what was happening in 2005: The U.S., Russia, China, Japan and the two Koreas were involved in “six party talks,” aimed at curtailing North Korea’s nuclear weapons program. That was a diplomatic effort.

At the same time, the U.S. Treasury Department, a law enforcement arm of the U.S. government, was investigating financial dealings surrounding North Korea.

U.S. Special Envoy to the six party talks from 2003 - 2006, Ambassador Joseph Detrani tells Polygraph.info Macau authorities froze North Korea-related accounts at Banco Delta Asia, a Macau-based bank, not Washington, after the U.S. Treasury Department threatened sanctions against the bank.

On September 15, 2005, U.S. Treasury had accused the bank of being a “willing pawn” in a North Korean scheme to launder money from illegal drugs and counterfeiting. The U.S said the North Korean government was using the laundered money to procure parts for its nuclear weapons program.The announcement triggered a run on the bank, prompting Macau authorities to take over the bank and freeze $25 million in North Korean accounts. A number of foreign banks followed suit, while many stopped or avoided dealing with North Korean entities. David Asher, who oversaw U.S. financial efforts in this matter at the time, said that the freeze was intended “to kill the chicken to scare the monkey.”

Four days after the Treasury warning, the six parties involved in the diplomatic talks announced in a joint statement a preliminary deal pledging economic and security benefits to North Korea in return for its de-nuclearization.

And so Detrani calls the Russian president’s claim on December 14, “wrong.”

According to Detrani, the action to freeze North Korean funds made it difficult for U.S. negotiators to explain the situation to Pyongyang, as the law enforcement track and the diplomatic track within the U.S. government proceeded separately on seemingly linked issues.

Top U.S. nuclear negotiator Christopher Hill speaks to journalists after a meeting with Chinese Vice Foreign Minister Wu Dawei, Beijing, September 6, 2006.

Daryl Kimball, Executive Director of the Arms Control Association, says Putin’s statement has “a kernel of truth” but is “not a balanced assessment.” He says, both parties missed opportunities to reach a compromise and both also took actions undermining the 2005 deal.

The long history of negotiations raises suspicion that North Korea never intended to stop its nuclear program and, on the other hand, some politicians in U.S. opposed talks. In the 1990’s, domestic “hard-liners” sought to derail the talks by freezing North Korean currency accounts, according to Leon V. Sigal, director of the Northeast Asia Cooperative Security Project at the Social Science Research Council and a contributor to 38 North project. Meanwhile, “hard-line” domestic opponents questioned the usefulness of negotiations with North Korea.

North Korean nuclear envoy Kim Kye Gwan talks to the media after his arrival in Beijing, China, March 17, 2007.

While the “freeze” did not end the talks, there was speculation that the delay allowed the North to stall, develop, and then test a nuclear device.

With the matter of frozen accounts still unresolved, and in what was a major milestone in its long-running nuclear weapons development efforts, North Korea test-fired seven missiles in July 2006 and detonated a nuclear device underground in October, triggering a UN Security Council resolution that imposed limited economic sanctions on Pyongyang.

The bank released the funds in April 2007 as talks with the North progressed. Still, the North test-fired a long-range missile in 2009 and then declared the six-party talks over, as they allegedly did not accord North Korea equal status. Pyongyang expressed interest in returning to the talks only in 2010 after being accused of sinking a South Korean ship.

Bruce Bennett, a senior security expert with RAND, argues the 2005 action the freezing of the accounts was justified. “The Russians are not describing this situation reasonably,” he told Polygraph.inc. “In 2005, it was believed that North Korea was printing tens of millions of dollars of U.S. currency each year -- the U.S. would have been irresponsible not to try to stop that,” he says.

Although the bank unblocked the accounts as talks progressed, North Korea “had no intention of stopping its nuclear weapons program,” says Bennett. North Korea stated as much “over and over again” and has pursued a “covert nuclear weapons program.”

In July 2017, multiple news reports indicate the U.S. intelligence community believes North Korea is on the verge of developing an intercontinental ballistic missile capable of delivering a nuclear warhead to U.S. soil sometime in the next year. Detrani, the U.S. envoy to the talks more than a decade ago, says that one could make a case that, all along, North Korea was seeking a way to acquire nuclear weapons without overtly violating agreements.

NORTH KOREA -- North Korea's intercontinental ballistic missile (ICBM), Hwasong-14 is launched at an undisclosed place, photo released by the government July 28, 2017.

If the history of diplomacy is any guide, Kimball assures, the parties should now find it more imperative to “seize fleeting opportunities for diplomatic engagement.” This, he says, is key “to reduce the risk of war and increase communications rather than bargain for concessions that may be the most desirable for one side but impossible to give for the other.”